|
Muni Bond 2 year old possible chapter 9 warning
09-19-2011, 03:37 PM
|
#1
|
Full time employment: Posting here.
Join Date: Jan 2010
Posts: 540
|
Muni Bond 2 year old possible chapter 9 warning
Hi all,
Today, I received an email from Fidelity indicating, "Event Description: POSSIBLE CHAPTER 9 FILING (08/19/09)". This is for a Detroit Michigan school district bond. I called Fidelity and spoke with a fixed income person who indicated that they are not sure why one of the bond analysis companies are sending out old alerts. I guess this is not the only case. He looked up the history and apparently two years ago the school district was contemplating filing chapter 9 and it apparently never happened. I could currently sell my bond for more than I paid for it (over $25k). Part of me wants to sell it since it is Detroit + School district (No offense to any Detroitians out there) - so, why take the risk? And part of me says to keep it since I do not believe I could find another 5% bond (with a 2028 maturity date) with a high rating. Any opinions?
Thanks!
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
09-19-2011, 03:47 PM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
|
Quote:
Originally Posted by Earl E Retyre
Hi all,
Today, I received an email from Fidelity indicating, "Event Description: POSSIBLE CHAPTER 9 FILING (08/19/09)". This is for a Detroit Michigan school district bond. I called Fidelity and spoke with a fixed income person who indicated that they are not sure why one of the bond analysis companies are sending out old alerts. I guess this is not the only case. He looked up the history and apparently two years ago the school district was contemplating filing chapter 9 and it apparently never happened. I could currently sell my bond for more than I paid for it (over $25k). Part of me wants to sell it since it is Detroit + School district (No offense to any Detroitians out there) - so, why take the risk? And part of me says to keep it since I do not believe I could find another 5% bond (with a 2028 maturity date) with a high rating. Any opinions?
Thanks!
|
[usual boilerplate]. If you can sell it at the price you think, get rid of the thing. Is it any safer than all other possibilities for your proceeds? Not likely.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
|
|
|
09-20-2011, 11:48 PM
|
#3
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,186
|
Quote:
Originally Posted by Earl E Retyre
Hi all,
"Event Description: POSSIBLE CHAPTER 9 FILING (08/19/09)"................5% bond (with a 2028 maturity date) with a high rating.
|
There seems to be an oxymoron here. Has the bond been re-rated upward since the issuers were considering the Chapt 9 filing? Or did the rating agencies just ignore the fact that the issuers were considering Chapt 9?
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
|
|
|
09-21-2011, 01:43 PM
|
#4
|
Full time employment: Posting here.
Join Date: Jan 2010
Posts: 540
|
I assume the rating is high since the potential Chapter 9 filing was 2 years ago and the filing never happened. But I am surprised as well. Maybe this gives insight into how much weight to put into the ratings. I am glad it is high however. I am going to sell it per haha's suggestion.
|
|
|
09-21-2011, 10:09 PM
|
#5
|
Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
|
I don't hold any individual bonds but I get the Fidelity Alerts for somebody's account. Thought I had it fixed about a year ago, but they're back again. Definitely a quality problem with their bond alerts.
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|